Joint meeting to address gas tax, roads

City and county look for solutions

A “Road Closed” sign marks construction on Bridge Street, one of numerous city streets in need of repaving. Bridge and related side streets south of 14th Street have already been repaired. The City of The Dalles and the Wasco County Board of Commissioners have planned a joint meeting Monday, Aug. 19 at noon in City Hall to discuss possible joint solutions for funding needed road work.
Kathy Ursprung Photo
Photo by Kathy Ursprung.

The Dalles City Council and Wasco County Commission are expected to decide Monday whether to send a tax measure that would fund a combined road district to voters in November.

The joint meeting takes place at noon Aug. 19 in City Hall, 313 Court Street. Also on the agenda will be a discussion of the city’s current annexation policy and agreement with the county on how properties within the urban growth area should be managed. That will include a look at the status of county roads inside the city limits and resources shared by the two agencies.

The city and county have been considering a property tax proposal of $1.1263 per $1,000 of assessed value that would generate about $2 million per year for road work. That rate would equate to almost $169 per year for a residence valued at $150,000. The revenue generated by the tax would provide about $1.75 million per year to the county and offset the loss of federal funding to maintain 700 miles of highways.

The remaining $750,000 would be used by the city to cover some costs for repair and maintenance of 88 miles of streets, about 60 percent of which need a more extensive level of work. After the first year, the city would receive 37.5 percent of tax receipts from the district.

Nolan Young, city manager, is recommending the council go it alone and ask voters to approve a 3 cent per gallon increase in the city gas tax instead. At a meeting in July, he stated that option “has the best chance of success” because it is shared by all motorists and not just imposed on property owners.

He said the joint proposal might be more difficult to get approved by voters because of the common perception that property taxes are already high. In addition, he said other taxing districts could be affected through compression.

Under Measure 5, which was approved by Oregonians in 1990, the amount of tax that can be obtained from property taxes is capped. Taxes for education (not including bonds) can’t exceed $5 per $1,000 of a property’s actual, or real market value. Those for general government can’t exceed $10 per $1,000.

When a property’s tax bill exceeds the legal limit, it’s reduced uniformly among agencies. Temporary levies are compressed before taxes that fund permanent districts, such as a library, fire or parks district.

For that reason, Young said the city had stayed away from additional property tax measures in the past to leave that open to agencies that did not have as many revenue sources.

Young said the city receives $450,000 per year from the existing tax of 3 cents per gallon, an amount that doubles if the tax does the same. The money raised before the tax expires in 20 years will retire about $6.1 million of debt for road work.

The city also receives money from the statewide gas tax, an amount of $810,000 in fiscal year 2012-13. When a share of water and wastewater fees are factored into the budget for road work, the city has about $1.4 million in revenue per year for improvements, but actual expenses are running about $1.5 million.

In a written comparison of the two potential methods of funding street improvements, Young stated that the gas tax increase would cost motorists an estimated $24 to $40 more per year for a set amount of time. Not only would property owners foot the initial bill for road work under the district for an indefinite period of time, he said they would be called on to pay an annual increase of up to 3 percent per year to meet increased costs.

The down side of a higher gas tax, he wrote, is that the additional revenue will only marginally meet the city’s street maintenance needs and not keep up with growing costs. If the county also proposes a tax measure, he said the competition could lower the chances of success for the city’s proposal.

Young said the pluses of the city and county going together on a measure was that the funding source would be more stable because it would not depend upon market and usage conditions. He said the city would realize more money over time and the expiration of other property tax measures, such as the construction bond for the college, would lower the impact on property owners.

However, he said the city is concerned that there is not enough time to ensure all of the necessary details for the agreement have been worked out before the proposal has to be presented to the public and adopted by Sept. 5. That is the last date to register ballot issues with the county elections office.

Young said one of the points of discussion at the Aug. 19 meeting in regard to the district should be whether the distribution of funds is proportionate to road usage within the city and outlying areas.

The county is considering formation of the road district because its funding for highway maintenance has fallen from $3.75 million per year in 2006 to $2.5 million in the current fiscal year. The reason for that drop in funding is the loss of federal compensation for logging cutbacks in national forests. Timber receipts were once shared with counties that had a large non-taxable amount of land base under public ownership. But a series of environmental regulations enacted in the 1970s and 1980s led to a drastic decline in harvest levels that halted that revenue stream.